Sell Deployments Not Products

"Businesses are focusing a greater share of their IT investment on leveraging emerging technologies to create competitive advantage . . . "

--DiamondCluster

Here's an interesting irony. While companies are spending less on innovation projects, they are spending more on emerging technologies that create innovation. The first finding is from a 2004 Harris Research reported cited by A.T. Kearney -- stating that companies spent 20% of IT budgets on innovation projects in 2004 versus 30% two years earlier.

The second is from a Forrester report cited by DiamondCluster in its white paper titled "How Should CTOs Lead Technology Innovation?" by Chris Curran, DiamondCluser's CTO. Companies allocated 18% of their technology spend on emerging technologies in 2005 versus 15% in 2003, according to Forrester.

Less on innovation projects but more on innovative technologies. Hmm.

I think the key to understanding this disconnect is the percentages. In absolute terms, technology acquisition costs are much less than the project costs into which they roll up. So companies' IT staffs can be spending more to check out the new stuff but not getting a proportionate buy-in from business managers who still hesitate to fully deploy these emerging technologies.

Chris Curran draws the conclusion from the Forrester findings that companies are looking more toward innovative technologies to drive competitive advantage. That may not be true, given the Harris study. On the other hand, the A.T. Kearney conclusion that the lower project spend points to an IT credibility issue may not be completely correct either. There may be some process issues here too -- like the CTO's inability to manage technology life cycles.

Chris discusses some of these issues in his paper. IT marketers might want to help their enterprise customers manage those issues so as to turn more product buys into deployments.